United Bank Limited (UBL) has made history by earning a pre-tax profit of Rs. 102.07 billion in one quarter. This is the first time any bank in Pakistan has crossed the Rs. 100 billion mark in just three months.
Usually, big banks in Pakistan earn between Rs. 120–180 billion in a whole year. Last year, UBL made Rs. 75.33 billion in the same quarter. This means profits increased by about 35.5% this year.
Smart Timing Helped UBL Earn Big
UBL’s success mainly came from making the right moves at the right time.
When the State Bank of Pakistan reduced interest rates to 10.5% and the government repaid its $1.3 billion Eurobond, investors became more confident in Pakistan’s economy.
Because of this:
- Old government bonds with higher returns became more valuable
- Their prices increased in the market
UBL took advantage of this situation and made a huge profit.
Big Gains from Government Bonds
UBL earned Rs. 30.54 billion from buying and selling securities, compared to only Rs. 5.83 billion last year.
Most of this profit (around Rs. 28 billion) was real cash, not just on paper. This means the bank actually sold bonds at higher prices and locked in profits.
Protecting Profits with Smart Strategy
After making profits, UBL moved Rs. 303.37 billion into safer investments called “amortized cost” or “held-to-maturity” securities.
This helped because:
- The bank didn’t have to adjust prices daily
- It avoided losses when interest rates later increased
When market yields rose from 11.10% to 12.70%, many banks faced losses—but UBL protected its gains.
Strong Growth in Deposits and Income
UBL’s growth wasn’t only from trading. Its core banking business also improved.
- Deposits increased from Rs. 2.6 trillion to Rs. 5.39 trillion
- Market share reached 13.8%, making it the second-largest bank in Pakistan
Income also grew:
- Interest income: Rs. 99.42 billion (up 18%)
- Fee income: Rs. 7.84 billion (also increased)
Focus on Profit, Not Just Size
UBL’s CEO, Muhammad Jawaid Iqbal, said the bank is not trying to become the biggest.
He explained:
- The bank prefers profitable growth
- It focuses on low-cost deposits instead of expensive ones
He even said UBL would accept a lower ranking if it means better profits.
High Taxes Reduced Final Profit
Although UBL earned Rs. 102.07 billion before tax, it had to pay Rs. 53.09 billion in taxes.
This is a very high tax rate of over 52%.
After tax, the profit was Rs. 48.98 billion, still higher than last year’s Rs. 35.60 billion.
UBL also announced a cash dividend of Rs. 8 per share.
Risk Management and Future Challenges
UBL shared some possible risks:
- If interest rates increase by 1%, the bank may lose about Rs. 8 billion
- However, management says this is manageable
The bank also has international operations and assets from SilkBank, which can help balance any losses.
New Leadership at UBL
There has been a leadership change:
- Zameer M. Choudrey is the new Chairman
- He replaced Anwar Pervez
At the same time, CEO Muhammad Jawaid Iqbal has been reappointed for another three years.
Conclusion
UBL’s record-breaking quarter came from:
- Smart timing in the bond market
- Strong deposit growth
- Careful risk management
Even with high taxes, the bank delivered one of the strongest performances in Pakistan’s banking history.
